Hi Heather,

I have a few questions about loan consolidation.  I realize it’s not always the best option and I am trying to decide if it would be for me, so I am wondering if you can answer this questions to help:

1) If I consolidate, do I have to consolidate everything?  I have one private loan so I know that would not be included, but I also have a few Perkins loans.  Is it possible to not include the Perkins loans in the Direct Loan consolidation, or is it an “all-or-nothing” situation?

2) Currently, less than half of my loans have outstanding interest, so if I consolidate is that going to actually increase my payments since I’m adding interest to ones that don’t have it, meaning I’d also pay more in the long run?

3) If I don’t consolidate, I would not be eligible for Public Service Forgiveness, correct?  Also, if I don’t consolidate, do you have a suggestion as to an “easy” way to keep track of lenders to make payments?  I have several loans (from years 08-11) and am worried that I won’t be able to keep track of the banks vs. the government vs. my school, etc.

Any answers you have would be super helpful!  Thanks so much for you work with this topic - your website has been a saving grace!

Borrowers can choose which loans to consolidate and Perkins loans can be excluded, yes.

The interest rate on a consolidation loan is based on the weighted average of the underlying loans.

The best way to track federal loans is using the National Student Loan Data System: http:// http://www.nslds.ed.gov

Inventory private loans by pulling your credit report at http://www.annualcreditreport.com

Only Federal Direct loans are eligible for PSLF, so lots of borrowers need to consolidate into Federal Direct, yes.

Thanks for the compliments!

Hi heather,

Your answer is very helpful. I appreciate your effort, on helping people by giving more relevent ways to tackle their critical financial situations.
Hey maryh,

you need to determine if consolidation is really for you before doing it. It may be that you want to pay off the loan faster as student debt consolidation loans tend to stretch out longer. But for most it is an attractive way to get your payments down and manage your student loan debt.